Auditing Cash, Revenues And Receivables Short Paper

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College essay writing serviceExplain how the audit of cash and revenues and accounts receivable may be overlapping and how an auditor may approach this area of the audit. The paper should be at least 1.5 – 2 pages.Our Blog. Copyright © 2018 HomeworkMarket.com.At our site, we make your academic life easier. Don’t worry about poring through tones of academic materials in search of ideas for your paper. Assign your homework to one of our writers. We’ll write and deliver your assignment on time!

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ACCT-Ques 2 TO 15 Receivables – The Alpha Company purchased $2.5 million dollars of merchandized on account

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2. The Alpha Company purchased $2.5 million dollars of merchandized on account. P & P Products gives terms of 1%, 10days, net 20. P&P Products believes that Alpha will take the discount if the discount is equal to atleast 16% return. P &P Products uses the net method to record sales. The transaction was not recorded by P & P Products. Assume 360 day year. Alpha paid 5 days past the discount period.Requirement: Make any necessary entries and/ or adjustments as needed.Construction Accounting3. P & P Products completed a contract to build a storage facility for Alpha Company. The construction began on January 1, 2010. The President of P& P Products has consulted with the controller regarding estimated cost and the resulting profit. During her discussion with the controller she was informed that P & P Products used the completed contract method to account for the construction project. The president asked the controller about the percentage of completion method she remembered from her college accounting courses. She is concerned about recognizing all of the profit in a single year. She asked that the controller prepare a schedule showing the effect on the income statement and balance sheet under the percentage-of-completion vs the completed contract method. Unfortunately, the controller has delegated this task to you.Cost for 2010= $3.2 million, cost for 2011= $5,760,000, cost for 2012= $3,840, 000Estimated cost to complete as of the end of 2010, $10,800,000.00, estimated cost to complete as of the end of 2011 $4,000,000.00.Billings to Alpha Company in 2010 was $3,000,000.00, for 2011 $5,000,000.00 with remaining billings during 2012.The contract price was $18,000,000.00Requirement: Prepare a schedule showing how much profit is recognized for years 2010, 2011, and 2012 under the percentage of completion and completed contract method.Leases4. P & P Products entered into a lease agreement with Beta Company, Inc. to purchase a piece of equipment on January 1, 2012. The terms of the lease are 8%, 5years lease with a 6 year useful life. The first payment is made on January 1, 2012. The machine has a fair value of $600,000.00. The residual value is zero. P & P Products does not know the interest rate that Beta uses. Assume that the entries have not yet made on the books of P & P Products.Requirement: Prepare a five year amortization schedule. Make all necessary entries on the books of P& P Products for the first year.Long Term Liabilities5. The following information is relevant to a bond issue. P & P Products issued $1,800,000.00 face value of bonds on April 1 of 2012. The bonds are sold for $1,908,000.00. They pay 8% interest each year on December 31 and become due in 10 years from their date of January 1 2012. One half of the bonds are redeemed on January 1 of 2015 for $918, 000.00. The company uses the effective interest method to amortize the bonds. The market rate is 6%.Requirement: Prepare an amortization schedule for the first 5 years and make entries for the issuance, payment of interest for years 2012 through 2014 and the redemption of the bonds.6. On January 1 2012 P & P Products purchased $1,000,000 of 8%, 5 years Delta Products ( a wholly owned subsidiary of P & P ) bonds on the open market for $960,000. The bonds are dated and were issued by Delta Products on January 1, 2010. The bonds pay interest each January 1 and July 1. The effective interest method is used. The market rate is 10%.Requirement: Make any necessary entries for Delta Products.Deferred Taxes7. The following information is provided:Income before Taxes $900,000.00Income before taxes included the following-Interest income of = $80,000(from municipal bonds)-Rental income was collected in advance in 2011 and earned in 2012 = $20,000-A piece of equipment was purchased in 2012. Depreciation per books = $40, 000 andper income taxes $100,000.-Warranty expense in 2012 was $20, 000.00 but for tax purposed only $5000was deductible-Assume that at the beginning of 2012 deferred tax asset = $8,000 due to the rent income.-Tax rate for 2012 and the foreseeable future is 40%.Requirement: a) Calculate the taxable income. b) Make the necessary tax entry. (Include the amounts for tax expense and deferred taxes)Property, Plant & Equipment8. The following information is provided:• Fourteen new computers- $140,000, additional $2,000 for freight and 6% tax on $140,000. Estimated useful life is 5 years with 5% salvage value. They are treated as a single unit for financial reporting purpose.• Ten existing computers will be traded in (total trade in value $10,000) for the new computers. The computers are treated as a single unit with an original cost of $80,000 and book value of $8,000. The remainder was paid in cash.• Additional IT personnel to support the additional workload created by HR department- $200,000 annually which includes fringe benefits and taxes.Requirement: Prepare the potential journal entries for the above items (considered not having commercial substances)9. P & P Products, during 2012, began and completed a small warehouse. Construction on the warehouse began January 2, 2012. Expenditures were made as follows: January 2, $1,000,000, March 1, $900,000, July 1, $400,000 and October 1, $800,000. P & P Products financed the project by issuing $1,000,000 in stock at the beginning of 2012 and borrowed $1,200,000 from The Last National Bank at an interest rate of 8%. In addition the company had the following debt: $1,000,000 interest rate of 9% borrowed in 2010, $2,000,000, 11% note borrowed in 2009. The warehouse was completed in 2013.Requirements:A) Calculate the 2012 weighted average accumulated expendituresB) How much is avoidable interestC) How much is actual interestD) Make the entry capitalizing interest.Investment10. P & P owns the following securities. Information relating to the below available for sale equity securities is presented.Security Cost Market Value, December 31, 2012A $10,000,000 $40,000,000B $20,000,000 $14,000,000C $5,000,000 $15,000,000D $20,000,000 $12,000,000Total $55,000,000 $81,000,000P & P is concerned about meeting the annual earnings estimate. The CEO has made two proposal related to yearend investment activities:1. Sell securities A and C. Assume the company will sell the securities for the 12/31/05 market value.2. Tell the auditors that the company has decided to sell all of the securities in the near term. This decision is the basis for a reclassification of the securities from available-for-sale to trading.Requirement: Compute the amount of the effect of each proposal on P & P’s Income statement. Ignore Income tax consideration.Pension11. The following facts pertain to the P & P Products’ pension plan for 2012. Expected return on plan assets is 15%, the FMV of plan assets, on January 1, 2012 is $100,000, the FMV on December 31, 2012 is $130,000, contribution to pension plan was $14,000 and benefits paid to retired employees was $8,000.Requirement: Determine the Actual return on plan assets component of net pension cost 2012. Assume contribution and benefit payments were made at year end.12. Refer to question 11, Consider the following information as of the beginning of 2012. The projected benefit obligation or PBO was $135, 000; the accumulated gain (loss) in Other Comprehensive Income (OCI) was $20,000 and the average remaining service period of active employees 20 years.Requirements:a) Determine the difference between the actual and expected return on plan assets for 2012.b) Determine the amortization of the net gain or loss accumulated in OCI.c) Determine the gain or loss recognized as a component of pension cost in 2012.d) Determine the accumulated gain or loss that would be carried forward in OCI in 2013.Stockholders’ Equity and Earnings Per Share13. During 2012 P&P Products made the following common stock transactions ( class B stock). For each of the following give the entry(s) that P & P Products would have made. The common stock has a par value of $10.A) On January 5th, P & P Products issued a property dividend. Investments (stock in the ABC company) comprising of 1000 shares was issued. The stock has a fair market value of $25 per share. The stock cost P &P Products $20 per share. They issued the ABC stock one month later. Make the entry(s).B) On February 14, P & P Products declared a 10 % stock dividend (assume 92,623 shares of $10 par outstanding stock). On that date market value of the stock was $14. One month later they issued the common stock dividend. Make the entry(s)C) On August 12th, P & P Products declared a cash dividend of $.50 per share of common stock. Assume 92, 623 shares plus those issued in (B). Make the entry(s).D) On October 14th, P & P Products issued a 2 for 1 stock split. (assume the number of shares outstanding you used in (C). Make the entry(s).E) On May 15th, P & P Products issued 5,000 shares of cumulative 8% preferred stock with a par value of $100 for $112 per share. Make the entry(s).F) Assume the following: At the end of the year there were 92, 623 shares of common stock outstanding and $5,000 shares of non-cumulative/non-participating preferred stock outstanding. P & P Products wants to issue cash dividends totalling $77, 050. Calculate how much goes to preferred stock holders and common stock holdersCurrent Liabilities14. The controller for P & Products, neglected to have her staff accrue the payroll for the last week in December, 2012. The following data should have been considered and accounted for in P & P Products’ book.-Total Payroll = $1,350, 000-Income taxes to be withheld = $ 150,000- FICA taxes applicable to the payroll accrual = $28,000-FUTA taxes on accrued payroll = $4,000- Total compensated absences related to the payroll = $75,000 vacation time and $85,000 sick time.-Employees who do not take vacation will receive compensation in lieu of time taken off. Sick time does not vest and if the employee does not used their sick time it is forfeited back to the company. Union dues that should have been withheld from employees’ payroll= $12, 000.Required: Journalized all entries that are necessary to accrue the above payroll.Receivables15. On May 1st, P & P factored $80, 000 of its account receivable to the Last Resort Finance Company. The finance company charged P & P a 5 % factor fee and withheld another 5 % for returns and allowances and sales discounts.Required:a) Prepare the required entries on May 1st for P & P assuming the receivable were factored without recourse.b) Prepare the required entries on May 1st for P & P assuming the receivable were factored with recourse. P & P accepts responsibility for uncollectible accounts estimated at $2,000.

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